Many people in Australia see owning a second property as offering a lifestyle change; a private getaway of sorts they can use as a holiday home. If you’re the proud owner of a holiday home, you have the perfect escape from the stress of daily life.
However, just like your regular home, you must get holiday home insurance for this property, so you have peace of mind whether or not you're occupying it. Whether you’re keeping the property for your own use or renting it out, getting holiday home insurance is simple once you know which policy you need to get.
If you plan on retaining your holiday home for yourself, a home and contents insurance policy should take care of your needs. All you need to do is let your insurance provider know if the place will remain unoccupied for more than 60 days, else your policy could get cancelled.
If you plan to rent out your holiday home for 90 days or more, you'll need to opt for landlord insurance. For short stays, like Airbnb, you should consider a holiday let insurer.
If you plan on using the holiday home as your own place
If you have a holiday home that you keep for vacations and weekend getaways, you will want to ensure it's well taken care of, both during your stay and when you're not around. For that, you'll need to get yourself home insurance.
However, there’s one big difference between insuring your home and a holiday house. When you don’t stay in a property and don’t visit it for a long time, most insurers consider it to be unoccupied. In this scenario, the insurer might either make you pay an additional excess (if you are making a claim) or cancel your policy.
A house is generally considered to be unoccupied if it lies vacant for 60 days, but each insurer can have different guidelines for this, so it’s important that you check this point while finalising your holiday home insurance. In most cases, the insurer could be persuaded to extend this date if you need to.
What are the benefits of home insurance cover while on vacation?
With holiday home insurance in place, you have peace of mind for when you are at your vacation home or away from it.
With the home insurance policy, you're financially covered for:
- Fire damage
- Storm and rainwater damage
- Escape of liquid (e.g. a burst pipe, especially in your absence)
- Impact at home (e.g. a tree falls on your property)
- Breakage of glass and other fixtures
- Malicious damage, vandalism
- Theft (or attempted theft)
- Furniture, furnishings and kitchenware
- Computers and electrical appliances
- Other valuables including jewellery, sunglasses and cameras
- Blinds, curtains, fitted carpets and rugs
- Earthquake or tsunami
What's not included in the holiday home insurance?
Along with knowing what you’re covered for, it’s also important to know what's not included in the home insurance for your holiday home, such as:
- Renting out your holiday home, for which you need landlord insurance
- Allowing your home to fall into disarray with overgrown grass, broken mailbox, etc.
- Any modifications or renovations you make to the home that change the structure
- Not keeping on top of repairs and maintenance
Are you looking to rent out your holiday home?
If you plan to rent out your holiday home and are looking to insure it, you have two options:
- Landlord insurance: For if you want to rent out your holiday home for 90 days or more at a time
- Holiday let insurance: For short stays, like Airbnb or Stayz.
What can you expect when you opt for holiday home insurance under these policies?
Getting landlord or short term holiday insurance is like getting an extension for your standard home and contents cover. With this, you’re covered against:
- Deliberate and accidental damage caused by tenants and their guests
- Theft by tenants and their guests
- Loss of rental income in case a tenant defaults on payment
- Loss of rental income if your property is uninhabitable after damage
- Loss of rental income if an unavoidable incident prevents the tenant from paying
- Changing keys and locks if a tenant doesn't return your keys
- Legal costs of taking action against tenants
- Legal liability if guests get hurt, slip, die or hold you legally liable for their injury, death or damage
- Damage to property contents provided for guest use
Since short term holiday lets like Airbnb are relatively new, not many insurance providers offer short-term rental insurance. Terri Scheer and ShareCover are two insurance providers that can provide you the cover that you are looking for.
What's not included in these insurance policies?
There are a few exclusions with landlord or Airbnb insurance cover:
- Water damage caused by creating an opening made to renovate or extend the property
- Poor housekeeping habits of your tenants
- Standard wear and tear, rust or mould
- Damage because of insects or vermin
- Repairs made by the tenant that you permitted
- Under landlord insurance you won't be covered for Airbnb or Stayz
- You won’t get cover if you are only renting out a room while living at the property
You can compare various home insurance choices before selecting an option that works for you.